Ag economy panel: Economists share 2022 outlook

KANSAS CITY, Mo. — Economists shared outlooks about the ag economy at the 2021 Ag Outlook Forum.

The event was held in Kansas City on Sept. 20 in partnership with the Agricultural Business Council of Kansas City and Agri-Pulse Communications.

Here are highlights from the panel.

“Trade demand has become very robust. As a matter of fact, it’s become record large in 2021 and is expected to grow a little bit from there, setting a new record. Agricultural trade is absolutely important for where we’re at today.”

Seth Meyer, chief economist

U.S. Department of Agriculture

“Farmers are experiencing some of the lowest interest rates since we’ve been measuring farm finances. … It’s hard to see it going a whole lot lower. However, there is some room for compression, when you think about intense competition between lenders and borrowers in farmland real estate. There are a lot of opportunities to get low interest rates across the board in the next six to 12 months.”

Jackson Takach, chief economist

Farmer Mac

“There’s a newer product called renewable diesel — it’s a hydrocarbon. Chemically, it meets the same standards as diesel. So, you can use it as a 100% replacement, whereas biodiesel you tend to have to blend in. So, that’s driving a lot of change. In 2021, we have a little over 2.2 billion gallons of biodiesel capacity. If you look at renewable diesel announcements and some current capacity, we will quickly exceed that in the next few years.”

Scott Gerlt, economist

American Soybean Association

“Our outlook for 2022 is for production to go down for cattle, prices up. That’s largely what we expect in 2023, as well. We are having a small pullback in beef exports in 2022 from the record high levels we’re expecting in 2021. On the hog side we’re not quite as optimistic. We have commercial production and slaughter up less than 1% and a little bit of a pullback in prices after the great prices we saw in 2021. We expect a little bit smaller exports, as well.”

Katelyn McCullock, director

Livestock Marketing Information Center